- MBA Boost - https://www.mbaboost.com -

Arenas of Competition

Arenas of Competition represent an increase in the complexity of the competitive structure analysis to focus on the nature of competition. Competitive arenas are groups of market players that apply similar strategic, operational and marketing tools and compete on the basis of similar competitive advantages.

Four types of arenas of competition are generally recognizable, each characterized by a different competitive advantage:

  1. Price and quality
  2. Timing and know-how
  3. Strongholds
  4. Deep pockets

Competition in each market segment naturally evolves within single arenas. As competition increases, an escalation occurs across different arenas, with a fundamental change in the nature of competition. The final stage of competition evolution is the eventual disruption of competitors’ own strategic competitive advantage. Leading firms build new competitive advantages to avoid profit erosion from competitive imitation of the old advantage.